New Zealand's annual migration extended its decade highs in June, as a record number of arrivals pushed the net inflow above the 2014 peak estimated by the Treasury and the Reserve Bank.

The country gained a net 38,300 migrants in the year through June, the highest since October 2003, Statistics New Zealand said. Annual arrivals rose to 100,800, the highest ever inflow, while departures were down 22 percent from the year before to 62,400, as fewer New Zealanders left for Australia. (See graph below)

The Treasury had forecast annual net migration to peak at 38,100 in September, before returning to the long-run assumption of 12,000 a year by 2017, while the central bank expected a mid-2014 peak at 37,000, according to its June Monetary Policy Statement. High levels of migration are stoking demand for housing and boosting spending in the economy, and Reserve Bank governor Graeme Wheeler has flagged stronger than expected inflows as a significant inflationary pressure. On Thursday Wheeler is expected to hike the official cash rate for a fourth time this year to 3.5 percent, but economists have speculated he will then take a pause in the tightening cycle, given milder-than-expected inflation and weaker global dairy prices.

"Net immigration is now clearly running ahead of the RBNZ's forecasts back in the June Monetary Policy Statement," Felix Delbruck, senior economist at Westpac New Zealand, said in a note. "That is a single bright spot in what has overall been a disappointing run of New Zealand data for the Reserve Bank.The major factor driving this migration cycle has been movements by both New Zealanders and Australians across the Tasman as the Australian job market has cooled. We don't expect Australian job prospects to improve decisively before early next year, so this migration dynamic could continue for a while."

New Zealand gained a seasonally adjusted 4,300 migrants in June, climbing from 3,980 in May, Statistics New Zealand said. Net migration to Australia was zero in June, the first time since August 1991 people leaving for Australia equaled those arriving from across the Tasman.

The number of short-term visitor arrivals rose 2 percent to a record 162,100 for a June month, helped by more visitors from Japan and China, the agency said. Overseas trips by New Zealanders rose 4 percent to 206,500 in June from the year earlier month.

(BusinessDesk)

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